When it’s better not to focus on profit
Thursday, January 17, 2019
Making as much money for your company as possible is a no-brainer — that's why you're in business, right? That's true, but there are some situations in which it can actually benefit your company's long-term bottom line not to strategize for immediate maximum profits.
Your reputation, relationships, and long-term planning can be used to an even greater advantage if you know when to pull back and how to refocus your aim. Use these tips to reboot for the short term and become even more successful in the long term.
Evaluate your competitor relationships.
A study from Boston College found that companies who leave money on the table in order not to completely alienate their competition can build stronger, mutually beneficial ties with those competitors in the long run.
Say you come up with a plan to purchase a liquidating business, and your best shot to do it is to team up with another entity in your marketplace. Memories are long: if you've been greedy or ruthless in your past dealings, that company's going to pass now. In any negotiation, leave room for goodwill, and give a little — it could ultimately pay off.
Put your employees' needs at the forefront.
Research published in the Academy of Management Journal found that when a manager puts his or her team members' salary concerns first, those team members return the favor with higher performance, and a company's profits effortlessly increase.
Never tighten your belt so much you're cutting into your employees' benefits, or they won't be motivated to do their best work.
Researchers from Stony Brook University report that many people shift their moral limits when more money is available to them. Equally as bad, the researchers say these people often try to make this kind of change look upstanding when it's really self-serving.
When you do something wrong to benefit yourself, people notice, and your reputation suffers. The last thing you want for your company is the perception that its managers are "flexible" morally; not only is that just plain wrong, but even if you clean up your reputation, it can take months or even years to be seen favorably and ethically by your industry.
Not only is it good for the soul, it's crucial to build community support by giving back, not taking, from others all the time. Plan generous acts of giving into your budget that will truly make a difference, and any profits you forfeit will be more than worth the sacrifice.
Always consider any potential profit grab from every angle. Is it better to wait rather than make an impulsive move?
Steel yourself to always use facts, not emotion, when deciding whether short-term gain is worth it in the long game. Trust your experience and be willing to wait when that's for the best — you'll be glad you did.
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